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Air Canada & Transat are “pleased” with CTA’s amendments to increase...

Air Canada & Transat are “pleased” with CTA’s amendments to increase foreign ownership levels

Thursday, May 9, 2019

MONTREAL — Air Canada and Transat have issued responses to Quebec Superior Court’s approval to increase permitted foreign ownership levels for Canadian airlines, both saying that they are “pleased” with yesterday’s final order.

The order approved the previously announced plan or arrangement under the Canada Business Corporations Act effecting amendments to Air Canada’s and Transat’s articles of incorporation to align the permitted level of non-Canadian ownership and control of its voting shares.

Prior to the Canada Transportation Act (CTA) amendments, no more than 25% of the voting interests of a Canadian air carrier (or a Canadian air carrier’s holding company) could be owned or controlled by non-Canadians.

The Canadian government’s purpose in implementing the CTA amendments is to attract more foreign investment and encourage growth in the aviation sector by increasing, from 25% to 49%, the permitted level of foreign ownership of Canadian airlines.

At the same time, the CTA amendments introduced two new limitations on voting ownership and control, by capping the voting rights of single non-Canadians and of the aggregate of non-Canadian air carriers at 25%.

More news:  What a week: Air Canada enters negotiations to buy Transat for $520 million

Both Air Canada and Transat are expected to file its amended articles, which will become effective on or about May 8, 2019.

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